Pa. Among Top 10 States With The Worst Taxes For The Average American
PHILADELPHIA (CBS) – 24/7 Wall Street has published a new report on the states with the worst tax rates for the average American, and the Keystone State is on it.
The lengthy report breaks down the data behind taxes, explaining that the nationwide average tax rate for the poorest 20% of Americans was 10.9%, compared to the 5.4% tax rate for the top 1%.
What's more, when looking at the taxes paid as a portion of income earned, all 50 states have a regressive tax system, which means that the poor are taxed more than the rich.
"In fact, the poorest 20% of individuals paid at least 12% of their total incomes in state and local taxes in seven of the 10 states with the most regressive tax systems," 24/7 Wall Street explains. "In contrast, the wealthiest 1% of residents paid no more than 3% in state and local taxes as a share of income in six of the 10 states."
So, which states did the website identify as the worst, tax-wise, for the average American?
Indiana came in 10th, and Washington was first.
Pennsylvania doesn't look so great either – the state ranked the sixth worst.
Here's why, according to 24/7 Wall St:
"Pennsylvania, which has a long-term plan to raise taxes to repair its transportation infrastructure, levies a tax of 41.8 cents per gallon of gasoline, the fifth highest rate in the nation. Residents with the lowest 20% of incomes paid 5.8% of their incomes on sales and excise taxes like these, versus the comparable rate of 0.6% for the state's wealthiest residents. Similarly, while property taxes tend to be levied more proportionately across the nation, Pennsylvania's poorest households paid nearly 4% of their income on their homes, while the wealthiest 1% paid just 1.6%. This was a relatively large gap compared to other states."
To compile the rankings, 24/7 Wall St. says it looked at ITEP's Tax Inequality Index scores for each state, the Gini coefficient from 2013 and economic data from the 2013 Census Bureau's 2013 American Community Survey.
To read the full report, click here.
